Michigan Collision Coverages Explained
In Michigan, your basic auto insurance policy is a No-Fault insurance policy. This covers 3 basic items, but in Michigan collision coverage is not part of a no-fault policy by default. The three items no-fault insurance covers in Michigan are:
- Medical expenses, payment of lost wages, and replacement services if you are hurt in an accident
- Payment for damage your car does to someone else’s property, other than a car; and
- Payment in case you are sued and found liable for injury to others.
While not required by law in Michigan to carry collision insurance, most lenders will require you have collision insurance if the vehicle is financed. There are three types of collision insurance coverage in the state of Michigan and we will cover those in this article.
The 3 Types of Michigan Collision Insurance
The first type of Michigan collision coverage is Limited Collision Coverage. If you are MORE THAN 50% at fault (you hit a tree, a person, another vehicle, etc.), your insurance pays nothing. You are responsible for the cost of repairs to your car. However, if you are 50% OR LESS at fault (you are rear-ended, side-swiped, etc.), your insurance pays. Your insurance will pay the cost of your repairs minus any deductible your policy has. You are responsible for the deductible.
The second type of Michigan collision coverage is Standard Collision Coverage. If you are MORE THAN 50% at fault, your insurance pays minus the deductible. If you are 50% OR LESS at fault, your insurance also pays minus the deductible.
The third and final type of collision insurance coverage in Michigan is Broad Form Collision Coverage. If you are MORE THAN 50% at fault, your insurance pays minus the deductible. If you are 50% OR LESS at fault, your insurance also pays for the damage but you do not pay your deductible.
As you can see, there is a lot of variation in options. All of which impact how much you pay for Michigan Auto Insurance premiums, deductibles and out of pocket damage costs. It is important to discuss all these items with your licensed Michigan Insurance Agent.
Remember, you do NOT have to have collision insurance in Michigan. However, if you are in an accident, even if it is not your fault and you have no collision coverage, you are responsible for your own damages.